Heena Metal Private Limited vs Global Extrusions Pvt. Ltd

IN THE MATTER OF: Heena Metal Private Limited Through Mr. Sunilkumar Kantilal Shah, The Director and Authorised Signatory, 117, Kika Street, Gulal Wadi, Mumbai, Maharashtra - 400004 ...Appellant

Versus

Global Extrusions Pvt. Ltd. Through the Director Mr. Manojbhai D. Akabari, Plot No. 238, GIDC Phase - II, Dared, Jamnagar, Gujarat - 361005 ...Respondent

Present: For Appellant : Mr. Ravi Raghunam & Mr. Namanjeet Singh Bhaha, Advocates

For Respondent : Mr. Kuldeep K Adesara, Advocate

JUDGMENT

(Hybrid Mode)

[Per: Arun Baroka, Member (Technical)] The present Appeal under Section 61 of the Insolvency and Bankruptcy

Code, 2016, (the "Code") against the order dated 29.11.2023 ("Impugned

Order") passed by the Hon'ble National Company Law Tribunal whereby the

Appellant's Insolvency Petition - C.P. (IB) No. 133(AHM)2022 filed under

Section 9 of the Insolvency and Bankruptcy Code, 2016 ("Code") has been

dismissed.

Appellants case:

2. The Appellant/Operational Creditor [Heena Metals] is engaged in the

business of manufacturing and trading of ferrous and non-ferrous metals.

The Appellant has two units - one at Mumbai and one at Jamnagar. However,

the Jamnagar unit was closed in 2020. The Respondent/Corporate Debtor

[Global Extrusions] is engaged in the business of manufacturing copper and

zinc alloys based brass rods, tubes, nut clamps etc. As part of their business

activities, the parties were regularly purchasing and selling goods to each

other and the crucial transactions are explained below:

25.05.2016 The Appellant had supplied materials to the to Respondent from their Jamnagar Unit, and 27.06.2017 raised numerous invoices between Sales 26.05.2016 to 27.06.2017 in all amounting to Rs. 79,44,085/-. [page 69-83].

[Table of Invoices @page 29]

11.03.2019 The Appellant purchased materials from the to Respondent and the amount of purchase was 02.01.2020 adjusted from the outstanding invoices raised Purchases against by the Appellant on the Respondent [page 84-85, 91-98] After adjusting the purchases and sales, a debt of Rs.73,59,095/-was outstanding against the invoices of Jamnagar Unit [averment @page 133].

17.10.2018 The Appellant had also supplied materials to to the Respondent from their Mumbai Unit and 27.05.2019 raised four invoices in all for Rs.49,70,041/- Sales [page 86-90] [Table of Invoices @page 30] These four Invoices provided for interest @24% on late payment [@page 86 bottom - Terms and Conditions]

3. It is claimed by the Appellant that since the Appellant's Jamnagar Unit

was closed in the year 2020, it was mutually agreed between the Appellant

Company Appeal (AT) (Insolvency) No. 277 of 2024 2 of 18 and the Respondent that the credit balance of Rs. 73,59,059/- with respect

to the Jamnagar Unit will be transferred to the Mumbai Unit of the Appellant.

The Respondent's ledger for the Mumbai Unit notes the above understanding

between the parties [page 101]. Further, the Respondent's ledger for the

Jamnagar Unit for the period from 01.04.2019 to 31.03.2020 admits an

amount of Rs.73,59,095/- as due on 01.04.2019 which constitutes a clear

acknowledgement of debt under Section 18 of the Limitation Act, 1963 [page

102]. The Respondent gave an acknowledgement / confirmation on the

Appellant's Ledger admitting an outstanding amount of Rs.1,19,67,353/-.

[page 100].

4. Thereafter, the Appellant issued a Demand Notice dated 22.11.2021 to

the Respondent u/s. 8 of the Code and the same was delivered on

25.11.2021. [page 104-116]. The Respondent issued a preliminary reply on

05.12.2021 [page 117-118]. The Respondent thereafter sent the Reply to the

Demand Notice on 31.12.2021 [page 119-125].

5. The Appellant filed C.P. (IB) No. 133(AHM)2022 u/s. Section 9 of the

Code against the Respondent before the Ld. Adjudicating Authority,

Ahmedabad for an operational debt of Rs.1,44,39,812/- (Principal Debt of Rs.

1,19,67,353/- and Interest of Rs.24,72,466/-). [page 126-143]. However, the

Adjudicating Authority, Ahmedabad dismissed the Insolvency Petition.

6. The Appellant contends that the finding that certain invoices raised by

the Corporate Debtor mentioned at paragraph 4 of the reply to demand notice

dated 22.11.2021 [page 119/ 122] are not accounted is erroneous since the

Company Appeal (AT) (Insolvency) No. 277 of 2024 3 of 18 Ledger Account of the Appellant accounts for the 7 invoices of the Respondent

and shows that the same was adjusted against the amounts owed by the

Respondent to the Appellant [page 99]. Even the Ledger Account jointly signed

by both parties accounts for all these 7 invoices [page 100]. This has not at all

been considered by the Ld. Adjudicating Authority. It is also contended that

even if the invoices at page 122 are read with page 99, it will be evident that

one of the Respondent's invoices amounting to Rs.2,75,143 is not mentioned

at page 122. Further, if the amounts against the 7 invoices mentioned at page

122 are added, it will come to Rs.18,87,995 and not Rs.21,63,138 (since the

invoice for Rs.2,75,143 is missed out in that table). The Appellant even

accounted for the invoice which was not mentioned by the Respondent in their

reply notice, and the principal outstanding debt owed by the Respondent was

arrived at after accounting all the invoices of the Respondent. The Appellant

had bonafide filed copies of all the invoices raised by the Respondent before

the Ld. Adjudicating Authority, Ahmedabad along with their Insolvency

Petition as Exhibit - E1 [kindly see reference at page 135]. The same invoices

are also filed with the present appeal as ANNEXURE -A/5 (COLLY) as they

formed part of the record of the Ld. Adjudicating Authority, Ahmedabad.

Hence, even the observation at page 65 (paragraph 10) of the Impugned Order

that no rebut is given by the Appellant despite the reply of the Corporate

Debtor leaves doubt of a plausible dispute is incorrect.

7. The finding that invoices amounting to Rs.73,59,059 are out of

limitation period is incorrect. 15 invoices were raised between 26.05.2016 to

27.06.2017. Assuming but not admitting that the limitation is to be

Company Appeal (AT) (Insolvency) No. 277 of 2024 4 of 18 calculated from 26.05.2016, it is submitted that the Insolvency Petition filed

on 03.05.2022 was within the period of limitation since the Respondent's

own accounts (ledger account) for the period from 01.04.2019 to 31.03.2020

admits a sum of Rs.73,59,059/- as outstanding on 01.04.2019 and on

31.03.2020 [page 102 and 101]. Even the Ledger jointly signed by the

Appellant and the Respondent acknowledges the amount of Rs.73, 59,059/-

as outstanding [page 100]. The acknowledgment of debt by the Respondent,

in their own books of accounts, being made within three years from

26.05.2016 i.e., on 01.04.2019 and thereafter again on 31.03.2020, extends

the period of limitation by a further three years. Hence, the Insolvency

Petition filed on 03.05.2022 was within the period of limitation. The Ld.

Adjudicating Authority, Ahmedabad has nowhere noticed the above

documents though they were undisputedly filed before the Ld. Adjudicating

Authority, Ahmedabad. In fact, in the order dated 06.11.2023 [page 153]

passed by the Ld. Adjudicating Authority, Ahmedabad it is observed that

there was no categorical denial of the ledger account that was jointly signed

by the parties, yet the same has not been considered while passing the

Impugned Order.

8. Alternatively, the Appellant is entitled to exclusion of the period from

15.03.2020 to 28.02.2022 while computing the period of limitation. As part

of their business activities, the parties were regularly purchasing and selling

goods to each other [averment @page 131; Admitted by Respondent @page

120(para 2)]. The last purchase of Rs.71,504/- was made by the Appellant

(Jamnagar unit) on 11.03.2019, and this amount was adjusted against the

Company Appeal (AT) (Insolvency) No. 277 of 2024 5 of 18 Appellant's invoice dated 25.05.2016, and as a result a sum of Rs.4,79,450/-

remained outstanding against this invoice. The debt thus became due on

11.03.2019 [page 108 r/w. page 133]. The last purchase of Rs.1,40,765/-

was made by the Appellant on 02.01.2020 and this amount was adjusted

against the earlier outstanding invoices and thus Rs.3,10,259/- is

outstanding against the Appellant's invoice dated 17.10.2018 [page 110 r/w.

page 134-135]. In the above circumstances, the Appellant has computed the

invoices raised by their Jamnagar Unit as being due on 11.03.2019, and the

invoices raised by their Mumbai unit as being due on 02.01.2020 in the Chart

of Computation [page 103]. This is permissible since the parties were

mutually dealing with each other on a regular basis and the accounts were

maintained as a running account (barter system of adjusting sales made by

the Appellant to the Respondent, from the purchases made by the Appellant

from the Respondent) [Kindly see Devesh Saraf vs. Rama Tent House &

Anr., CA (AT) (Ins) No. 51 of 2023, judgment dated 11.10.2023 (para 3,

4, 9)]. Hence the period of limitation would commence on 11.03.2019 and/or

02.01.2020, and due to the Covid-19 Pandemic and the order dated

10.01.2022 passed by the Hon'ble Supreme Court of India in M.A. No. 21

of 2022 in MA 665 of 2021 in SMW(C) No. 3 of 2020, the period from

15.03.2020 to 28.02.2022 has to be excluded while computing the period of

limitation. Thus, a balance period of limitation of approximately 2 years

(period of limitation elapsed was 11.03.2019 to 14.03.2020) was available for

the Appellant, and thus, the Insolvency Petition filed on 03.05.2022 was

within the period of limitation.

Company Appeal (AT) (Insolvency) No. 277 of 2024 6 of 18

9. Alternatively, the Appellant is entitled to the benefit of Section 25(3) of

the Indian Contract Act. Even as per Section 25(3) of the Indian Contract Act,

1872 an agreement to pay a time barred debt is enforceable in law. In the

present case the Appellant's ledger with the acknowledgement / confirmation

given by the Respondent for an outstanding of Rs.1,19,67,353/- [page 100]

falls under Section 25(3) and is an enforceable operational debt [Pleading at

page 41 (para 9.6), Appeal].

10. The Appellant therefore prays to allow the present appeal, set aside the

Impugned Order, and admit C.P. (IB) No. 133(AHM) 2022.

Respondent's Case:

11. The tabular statement given for details of invoice date wise with amount

due as given in page no. 17 of the Impugned Order whereby, the entire

payment of Rs. 73,59,059/- is an amount due from 25.05.2016 to 27.06.2017

and this entire amount is related to Jamnagar unit. From the account

statement annexed by the Appellant in its Appeal at Page no. 100, the

Appellant has shown the transaction from 01.04.2019 including opening

balance of the Mumbai unit and the sale and purchase by the appellant in

the Mumbai unit during course of 01.04.2019 to 02.01.2020. In the above

said account, the Appellant has transferred the entire amount of their supply

of Jamnagar unit on 31.03.2020 (Rs. 73, 59,059/-). This entire amount is

nothing but a time barred debt as far as the Corporate Debtor is concerned

since all the invoices in the above amount pertaining to period of 28.05.2016

to 27.06.2017. Therefore, the outstanding which has been shown in the

account statement as Rs. 1,19,67,353/- is inclusive of time barred debt of Rs.

73,59,059/-, which is not in dispute.

Company Appeal (AT) (Insolvency) No. 277 of 2024 7 of 18

12. Furthermore, as per the Answering Respondent, whenever they have

demanded the outstanding dues payable to them by the Appellant regarding

their supplies at Mumbai unit, the Appellant has been denying the payment

on the premise of Jamnagar unit despite the fact that entire amount had

become time barred. The Appellant has mischievously transferred the entire

amount of Jamnagar supply wherein, the invoices had become time barred

on dated 31.03.2020 so that it can mislead the 1d. Adjudicating Authority,

Ahmedabad as if it is a current dues payable within three years of filing of

petition by the Appellant.

13. However, the Ld. Adjudicating Authority, Ahmedabad could find out

from the fact that the entire Rs. 73,59,095/-is related to invoices, which have

become due much before three years of filing and entire amount was time

barred.

14. Further, there are dispute, regarding the sale which has been made at

Mumbai unit to the Appellant and not been considered. This is a dispute

which has been referred and as such, outstanding claimed by the Appellant

is in dispute and which is at higher side as some -invoices for sale made by

the Answering Respondent has not been considered.

15. Whatever principal outstanding is claimed by the Appellant, after

adjusting the time barred debt of Rs.73,59,095/ it falls much below the

threshold limit of Rs. 1 Crore. It may also be noted that there is a no specific

acknowledgement of debt as stipulated under Section 18 of the Limitation Act,

1963. In fact, in response to Demand Notice dated 22.11.2021, in the Reply

Company Appeal (AT) (Insolvency) No. 277 of 2024 8 of 18 dated 31.12.2021 filed by the Answering Respondent, it has clearly been

mentioned that the entire amounts of Rs. 73,59,095/- of Jamnagar Unit is

time barred and there is no acknowledgement of debt and on the contrary, it

is contended as time barred for Jamnagar Unit and not payable. The

Answering Respondent is asking payment for its Mumbai unit treating that

nothing is payable for Jamnagar unit as the entire debt is time barred. Even

the statements, are only reflection of entries of the total amount but the same

is not specifically acknowledged as an outstanding dues by the Answering

Respondent. Furthermore, without prejudice to the above, the last invoice

which is time barred is dated 27.06.2017 and as such, the three years period

of last invoice has expired on 26.06.2020 and there is no statement of entries

as alleged as ledger account copy is on record prior to above date.

16. There is no specific acknowledgement of debt except for ledger copies

without any acknowledgement. As such, the petition is not maintainable after

excluding the time barred outstanding /debt. Even the statements / ledger

copies on record are in any case after the expiry period of three years though

according to us these are not acknowledgement of debt but still even if

considered, then also limitation would not extend as after the expiry period

any such document cannot extend the limitation period. It is settled law 'that

any acknowledgement after the date of expiry of limitation period i.e., three

years, would have no effect and limitation would not extend on the: basis of

such acknowledgement. [Refer Sampuran Singh & Ors. V. Niranjan Kaur &

Ors.- Supreme Court].

Company Appeal (AT) (Insolvency) No. 277 of 2024 9 of 18

17. In view of the fact that no interest was payable as there are no terms

and conditions for interest payment as per the invoices and the interest has

been arbitrarily calculated without any liability on the part of the Answering

Respondent to that effect.

18. Therefore, in sum and substance, there is no infirmity in the Impugned

Order and this Hon'ble Appellate Authority may kindly confirm the Impugned

Order.

Appraisal

19. We have heard the counsels of both sides and perused materials placed

on record.

20. The issue before us is whether in this case the Appellant meets the

threshold and whether any dispute exists and for that reason the petition is

not to be admitted in insolvency under Section 9 of the Code.

21. The Appellant had filed C.P. (IB) No. 133(AHM)2022 dated 03.03.2022

under Section 9 of the Code against the Respondent for an operational debt

of Rs.1,44,39,812/- (Principal Debt of Rs.1,19,67,353/- and Interest of

Rs.24,72,466/-). The Appellant submits that by the Impugned Order, the

Adjudicating Authority has erroneously dismissed the Insolvency Petition filed

by the Appellant under Section 9 of the Code.

22. The Appellant contends that the finding at paragraph 10 of the

Impugned Order that certain invoices raised by the Respondent are not

accounted for, and there is a doubt of a plausible dispute is erroneous for

following reasons:

Company Appeal (AT) (Insolvency) No. 277 of 2024 10 of 18 o All the invoices mentioned in paragraph 4 of the Respondent's Reply Notice dated 31.12.2021 are clearly mentioned in the Appellant's ledger and also in Appellant's ledger with the acknowledgement / confirmation given by the Respondent for the period from 01.04.2019 to 31.03.2020.

o The principal debt of Rs.1,19,67,353/- is arrived at after deducting the sum of Rs.21,63,138/- from the outstanding of Rs.1,41,30,491.42/-.

o When the sums mentioned against all the invoices set out in paragraph 4 of the Respondent's Reply Notice dated 31.12.2021 are added, it comes only to Rs.18,87,995/- (as against Rs.21,63,138/- mentioned therein). This is because the Respondent missed out one invoice and gave wrong figures for the Invoice bearing no.187. However, the Appellant had bonafide disclosed in their Ledger, even the invoice that was left out by the Respondent, and has shown the correct calculation for Rs.21,63,138/-. The Appellant had also filed all these invoices adding up to Rs.21, 63,138/- alongwith their Insolvency Petition.

o The Appellant further contends the finding at paragraph 12 of the Impugned Order that the invoices totally amounting to Rs.73,59,059/- are time barred is erroneous due to following reasons:

o The Respondent's ledger for the period from 01.04.2019 to 31.03.2020 admits an amount of Rs.73,59,095/- as due on 01.04.2019 which constitutes a clear acknowledgement of debt under Section 18 of the Limitation Act, 1963.

o The Respondent has further admitted that a sum of Rs.1,19,67,353/- as outstanding to the Appellant (which includes the sum of Rs.73,59,059/- being the amount transferred from the Jamnagar Unit account to the Mumbai Unit's account) and this is clearly evident from the following documents: (i) Appellant's ledger with the acknowledgement / confirmation given by the Respondent for the period from 01.04.2019 to 31.03.2020; (ii) Appellant's Ledger for the period

Company Appeal (AT) (Insolvency) No. 277 of 2024 11 of 18 01.04.2019 to 31.03.2020; (iii) Respondent's Ledger for the period from 01.04.2019 to 31.03.2020.

o Also, the Adjudicating Authority, while reserving orders in the Insolvency Petition has noted as follows:

"...

With the consent of both the parties, we have heard the arguments and perused the records. The documents annexed to page No. 77, with the petition jointly signed by both the parties, was admittedly not categorically denied in the reply by the Counsel for the respondent.

....

Meanwhile, Learned Counsel for the applicant is directed to place on record the original copy of the document annexed at page No. 77, within seven days, as well as a synopsis by both the sides, within the pleadings."

o Though the original was submitted by the Appellant, however, the Adjudicating Authority, failed to consider this crucial document i.e., the Appellant's ledger with the acknowledgement / confirmation given by the Respondent for the period from 01.04.2019 to 31.03.2020 while passing the Impugned Order.

23. From the above arguments the Appellant contends that through the

Respondent's Ledger for the period from 01.04.2019 to 31.03.2020 there is

an admission of an amount of Rs.73,59,095/- as due on 01.04.2019, which

constitutes a clear acknowledgement of debt under Section 18 of the

Limitation Act, 1963. Further the said acknowledgement is before the expiry

of the period of three years from the date of the invoices raised from

28.05.2016 to 27.06.2017 and the Appellant had filed the Insolvency

Application on 03.05.2022 before the Adjudicating Authority, well before the

expiry of the limitation period. Thus, amount pertaining to period of

Company Appeal (AT) (Insolvency) No. 277 of 2024 12 of 18 28.05.2016 to 27.06.2017 is not time barred debt as far as the Corporate

Debtor is concerned.

24. Rebutting the arguments canvassed by the Appellant, Respondent

contends that the outstanding which has been shown in the account

statement as Rs.11967353/- is inclusive of time barred debt of

Rs.73,59,059/-. Appellant has mischievously transferred the entire amount

of Jamnagar supply wherein; the invoices had become time barred on dated

31.03.2020 so that it can mislead the Adjudicating Authority as if it is a

current dues payable within three years of filing of petition by the Appellant.

Whatever principal outstanding is claimed by the Appellant after adjusting

the time barred debt of Rs. 73,59,095/- it falls much below the threshold limit

of Rs. 1 crore.

25. The main dispute is regarding Jamnagar unit. We note the crucial sales

invoices as claimed by the Appellant [@29APB] are noted as below:

Company Appeal (AT) (Insolvency) No. 277 of 2024 13 of 18

26. We find that the above sales invoices have been added to the Mumbai

unit's accounts and outstanding of operational debt of Rs.1,44,39,812/-

(Principal Debt of Rs.1,19,67,353/- and Interest of Rs.24,72,466/-) has been

accordingly worked out. There is a dispute regarding the accounting process

adopted by the Appellant. Appellant claims that as part of their business

activities, the parties were regularly purchasing and selling goods to each

other [averment @page 131; Admitted by Respondent @page 120(para 2)]. The

last purchase of Rs.71,504/- was made by the Appellant (Jamnagar unit) on

11.03.2019, and this amount was adjusted against the Appellant's invoice

dated 25.05.2016, and as a result a sum of Rs.4,79,450/- remained

outstanding against this invoice. The debt thus became due on 11.03.2019

[page 108 r/w. page 133]. The last purchase of Rs.1,40,765/- was made by

the Appellant on 02.01.2020 and this amount was adjusted against the earlier

outstanding invoices and thus Rs.3,10,259 is outstanding against the

Appellant's invoice dated 17.10.2018 [page 110 r/w. page 134-135]. In the

above circumstances, the Appellant has computed the invoices raised by their

Jamnagar Unit as being due on 11.03.2019, and the invoices raised by their

Mumbai unit as being due on 02.01.2020 in the Chart of Computation [page

103]. This is permissible since the parties were mutually dealing with each

other on a regular basis and the accounts were maintained as a running

account (barter system of adjusting sales made by the Appellant to the

Respondent, from the purchases made by the Appellant from the Respondent)

[Appellant relies on Devesh Saraf vs. Rama Tent House & Anr., CA (AT)

(Ins) No. 51 of 2023, judgment dated 11.10.2023]. We first delve into this

issue. Firstly, the Respondent has denied the acceptance of unilateral transfer

Company Appeal (AT) (Insolvency) No. 277 of 2024 14 of 18 of outstanding balance of Jamnagar unit to the Mumbai unit. Furthermore,

even if it is assumed to be accepted, the APB has first four entries - as noted

above - which pertain to the year 2016 and total to Rs.42,57,226/- [Rs

10,64,476 + Rs 10,63,966 + Rs.10,67,713 + Rs 10,61,071] and as on the date

of filing of the petition in 2022 are time-barred and if we deduct these from

the Principal debt of Rs 1,19,67,353/-, the CP doesn't meet the threshold. The

exclusion period, as claimed by the Appellant under the orders of Hon'ble

Supreme Court of India in M.A. No. 21 of 2022 in MA 665 of 2021 in SMW(C)

No. 3 of 2020, i.e. the period from 15.03.2020 to 28.02.2022 - to be excluded

while computing the period of limitation, is not available for these invoices as

three years had already lapsed on 30th May 2019 [basis the invoice no

TD/004 dated 30th May 2016. By unilateral adjustment of purchases against

earlier invoices as claimed by the Appellant, the Appellant has innovatively

tried to surpass the limitation.

27. We have also perused the Ledger account of Respondent-CD-Global

Extrusion which is at page 100- which doesn't bear any signature but

presumably prepared after 31st March 2020 as the last entry pertains to the

journal entry of that date. Very interestingly, the journal entry dated 31st

March 2020 has been made, which transfers all the liabilities of the Jamnagar

unit into the account in the Mumbai unit- which is claimed to be done by the

Appellant based on mutual discussion. Even though it has been signed by

both the parties, but the Respondent denies any such understanding. We find

that firstly it cannot be treated as acknowledgement of debt as it is just the

transfer of the sales and purchase entries of earlier times from its Jamnagar

Company Appeal (AT) (Insolvency) No. 277 of 2024 15 of 18 unit - which had been closed. Whatever dates of those sales and purchases

in Jamnagar account will continue to remain with the original date and

cannot give new date and new life for limitation purposes to the transactions,

basis just a journal entry which just shifts the entries from one account to

another as it is, while maintaining the original character of the transactions.

28. Even otherwise, we find that it may not be of any assistance to the

appellant for the reason that the first four entries for which journal entry has

been made on 31st March 2020 are time barred under the Code and even if it

is treated as an acknowledgement, the petition is beyond three years for these

entries and this debt is time barred and therefore for these invoices Appellant

cannot pursue under code.

29. We also note in this case, though the ledger of Respondent- Global

Extrusions is signed by the Respondent but it is not a clear promise to pay

₹1,19,67,353 and in such a situation it cannot be argued that it falls within

Section 25(3) of the Contract Act and creates a fresh contractual obligation.

In this case, the document is ambiguous and merely an internal ledger and a

routine balance confirmation without promise language, thus, we cannot

accept it as a Section 25(3) promise, and the operational debt would remain

time‑barred for IBC purposes.

30. We also find that no interest was payable as there are no terms and

conditions for interest payment as per these invoices and the interest has

been arbitrarily calculated.

Company Appeal (AT) (Insolvency) No. 277 of 2024 16 of 18

31. The Appellant has also argued that as part of their business activities,

the parties were regularly purchasing and selling goods with each other. It

also relies on the last purchase of Rs.71,504/- which was made by the

Appellant (Jamnagar unit) on 11.03.2019, and this amount was adjusted

against the Appellant's invoice dated 25.05.2016, and as a result a sum of

Rs.4,79,450/- remained outstanding against this invoice. The debt thus

became due on 11.03.2019. Further, the last purchase of Rs.1,40,765/- was

made by the Appellant on 02.01.2020 and this amount was adjusted against

the earlier outstanding invoices and thus Rs.3,10,259 is outstanding against

the Appellant's invoice dated 17.10.2018. Thus, the Appellant has computed

the invoices raised by their Jamnagar Unit as being due on 11.03.2019, and

the invoices raised by their Mumbai unit as being due on 02.01.2020 in the

Chart of Computation. This is permissible since the parties were mutually

dealing with each other on a regular basis and the accounts were maintained

as a running account (barter system of adjusting sales made by the Appellant

to the Respondent, from the purchases made by the Appellant from the

Respondent) and relies on Devesh Saraf vs. Rama Tent House & Anr., CA

(AT) (Ins) No. 51 of 2023, judgment dated 11.10.2023.

32. We find that reliance on Devesh is of no assistance to the Appellant as

in the cited judgement there was an acknowledgement in the form of email

and their facts are totally different in the present case. Furthermore,

Appellant in an innovative attempt to extend the limitation using such

adjustment of book entries and that too unilaterally is misleading us and thus

the Appellant has been wasting the precious time of the Tribunal.

Company Appeal (AT) (Insolvency) No. 277 of 2024 17 of 18 Order

33. For the reasons noted above, we find that the conclusions arrived at

regarding the threshold in the impugned order cannot be faulted upon.

34. We dismiss the appeal. All the related IAs disposed of. No orders as to

costs.

[Justice Mohammad Faiz Alam Khan] Member (Judicial)

[Arun Baroka] Member (Technical) New Delhi.

January 09, 2026.

Pawan

Company Appeal (AT) (Insolvency) No. 277 of 2024 18 of 18